Featured Guest
Greg Garman

Greg Garman is the CEO of Law Clerk and a partner at Garman Turner Gordon. Mr. Garman is a...

Your Host
Christopher T. Anderson

Christopher T. Anderson has authored numerous articles and speaks on a wide range of topics, including law firm management,...

Episode Notes

A tidal wave of supply is outstripping demand in the business of law, and some firms are struggling to handle the imbalances in the marketplace. Are too many people entering the profession? Is the law firm business model in need of an overhaul? Un-Billable Hour host Christopher Anderson welcomes Greg Garman to examine broad trends in legal business and discuss challenges the profession faces as it moves into the future.

Be sure to tune in for part two of Christopher and Greg’s conversation, airing later this month!

Greg Garman is the CEO of LAWCLERK and a partner at Garman Turner Gordon.

Special thanks to our sponsors, NexaSolo Practice UniversityScorpion, and Lawclerk.

Transcript

The Un-Billable Hour

Change Waves in Small Law: Surf or Drown? – Part 1

11/14/2019

 

[Music]

 

Intro: Managing your law practice can be challenging. Marketing, time management, attracting clients, and all the things besides the cases that you need to do that aren’t billable. Welcome to this edition of The Un-Billable Hour, the Law Practice Advisory Podcast. This is where you will get the information you need from expert guests and host Christopher Anderson, here on Legal Talk Network.

 

[Music]

 

Christopher T. Anderson: Welcome to The Un-Billable Hour, the Law Practice Advisory Podcast helping attorneys achieve more success. We are glad you can listen today on the Legal Talk Network.

 

Today’s episode is about — well, it’s about everything because once in a while I want to take a step back. On The Un-Billable Hour, we focus deeply on really impactful things that you can do to get your law firm to run more like a business, to serve you, much of what we talk about will make your business and your life better and it’s all in these details in the deep learning that we do together but sometimes I think it makes sense to pull back and take a look at the forest instead of the trees, and I like to do that a couple of times a year to kind of get that better perspective, and this year we’re going to talk today about change waves in small law, whether surf or drown and my guest today to talk about that, actually we’re going to do this as a two-part episode is Greg Garman because there’s just too much to do in one show.

 

So we’re going to talk to Greg Garman today. He’s the CEO of LAWCLERK, he’s been studying the evolution of the legal marketplace as a lawyer, as a business owner for many years and he’s going to be sharing some of his deep insight into what’s been happening and what is likely to happen and how fast.

 

And, of course, I am your host, Christopher Anderson. I’m an attorney with a singular passion for helping other lawyers achieve success with their law firm businesses.

 

In The Un-Billable Hour each month we explore an area important to help you be a more profitable lawyer through growing your revenues, getting back more of your time and/or getting more professional satisfaction from your business. The Un-Billable Hour is dedicated to bring you guests each month to help you learn more about how to make your law firm business work for you, instead of the other way around.

 

Before we get started, I do want to say a thank you to our sponsors, Nexa, Solo Practice University, Scorpion, and LAWCLERK.

 

Nexa, formerly known as Answer1 is a leading virtual receptionist and answering service provider for law firms. Learn more by giving them a call at 1800-267-9371 or online at www.nexa.com.

 

Solo Practice University is a great resource for solos, no matter how long you have been practicing. Make sure you check out solopracticeuniversity.com and learn how to run your practice better.

 

Scorpion crushes the standard for law firm online marketing with proven campaign strategies to get attorneys better cases from the Internet. Partner with Scorpion to get an award-winning website and ROI-positive marketing programs today. Visit scorpionlegal.com/podcast.

 

LAWCLERK, where attorneys go to hire freelance lawyers. Visit lawclerk.legal to learn how to increase your productivity and your profits by working with talented freelance lawyers.

 

And as I said before, today’s episode of The Un-Billable Hour is ‘Change Waves in Small Law: Surf or Drown?” And I’ve phrased the title that way because it really is a choice. But it’s one that we’re all going to be facing and are already facing. My guest today to talk about this with me is Greg Garman. He’s the founder and CEO of LAWCLERK.

 

Greg, welcome to The Un-Billable Hour.

 

Greg Garman: Chris, thanks so much for having me.

 

Christopher T. Anderson: Not at all. It’s my pleasure and my privilege. I really appreciate you being on. So, as I always do and become quite notorious for my — my introductions are awful. So I just tell, I mean, obviously LAWCLERK is a sponsor, it’s not why you’re here, it’s you’re here because you and I have had a couple of really fascinating conversations that I wanted to share with our listeners but just tell us a little bit about LAWCLERK, the background that led you to bring LAWCLERK to the marketplace.

 

Greg Garman: Yeah, thanks Chris. So LAWCLERK is a proud sponsor of your show, but I’m here today to kind of talk about my 25 years of history not only as a practicing lawyer but I’ve spent most of it in the business of law.

 

I started as a lawyer in the 90s, worked my way from being a summer associate to the managing partner of a pretty good-sized regional firm and ultimately left to form a boutique law firm of much smaller headcount primarily because I saw the world was changing and LAWCLERK was a project that came out of our passion for what we did as lawyers but really solos and small law they needed more tools to do what it is that we as lawyers do best.

 

(00:05:13)

 

And so LAWCLERK was built because I and my co-founders who are all lawyers, we all came from the same background. We realized that some of those new tools that were needed included the use of freelancers, and so, LAWCLERK is a marketplace, it’s a place to build a virtual law firm, hire virtual associates either to work with once or to work with on a regular basis to get more work done faster for our clients in a way that increases profits, lowers overhead, allows for and gives specialized services, subject matter expertise. It really is a way we built it so that’s small and solo shops and even in-house counsel can get all the tools of specialization in this world without having to increase their cost structure or their overhead.

 

Christopher T. Anderson: Yeah, and I think that’s really great. I remind our listeners, we actually have an entire episode about outsourcing and using outsourced store or gig or however you want to call it but legal professionals to help expand temporarily our capacity to like you said serve our clients better.

 

Today though, we’re going to really like we’re going to pull back, and pull back, and pull back to 10, 20 maybe even 30,000 feet because there are some really big changes coming. I mean, not for nothing, even in LAWCLERK. This is a business that probably couldn’t have existed 20, 30 years ago because of the demand, because of the perception, because of the way that people saw how a law firm operated and the fact that you’re able to start that business and that it’s doing well, I think it’s one of the — one of the things that are indicating the big changes that are coming, but let’s talk about it from the top down look, what are you seeing as the big challenges that the legal industry is facing right now, like total macro level?

 

Greg Garman: So, legal is the largest piece of the U.S. economy that hasn’t been disrupted by technology. We account for nearly 2% of the U.S. GDP, that makes us a nearly $350 billion industry, and to put that in perspective, that’s the same size as these — as the entire economy of Israel. It’s larger than the economy of Ireland. It’s larger than the economy of Singapore and there is no piece of the economy that operates exactly the same way that it did 80 years ago and so first and foremost we are in a world in which simple evolution is catching up to our profession, but on top of that, the economics of law are just fundamentally changing and they’re changing in a way that’s going to make it, I don’t want to say more difficult but we’re going to have to evolve. So in 1975, legal services were about one-half of 1% of GDP and it peaked out in 2006 and the peak was just shy of 2% of GDP.

 

Christopher T. Anderson: But as a percentage of GDP that’s a 400% increase of share of everything that’s produced, four times as much 30 years later was going into legal.

 

Greg Garman: And that’s what made this such and in some ways an easy profession for generations of lawyers. We focused exclusively on revenue. We measure ourselves kind of the same way that Dot-coms did in the late 90s. We talked about revenue per lawyer, we talked about revenue per employee, matured companies talk about themselves in a cost structure, in a profit component. Those weren’t even the metrics of things that we talked about.

 

So 2006 rolls around, we peek out as a percentage of GDP. This is pre-Great Recession and clients started to re-evaluate the way that they were spending their money with lawyers. Bigger companies started to say things like, I’m not going to train your young lawyers. The acceptance of just an 8, 10 whatever percentage increase of an hourly rate, those stopped a decade ago and people have I think inappropriately wanted to blame the Great Recession for the changes in legal when this was a trend that started before that. And so, the growth machine came to an end more than a decade ago and really what that’s left us is it’s left us with an infrastructure that has a supply demand tidal wave, I kind of talked about on a regular basis that’s hitting this industry and we’re not very well-prepared for it. We’re still producing 30,000-35,000 new lawyers a year in an area of the economy that candidly is no longer growing.

 

(00:10:04)

 

And that’s having for good or bad a monumental impact on the way that will operate and we’ll probably dig into that some. Underemployment is in that I think we see on almost an epidemic basis in legal. This is a really hard industry, in that it’s regularly expected that you’re going to work not, just a 40-hour week but a 50, 60, 70-hour week, and that leads people to make life decisions in which they decide raising children is incompatible with being a 70-hour work week lawyer. It means that if a spouse has to move, it’s tough to take a bar and every time you get relocated for your business. So there’s dramatic underemployment in this industry.

 

Christopher T. Anderson: So I just want to be clear by underemployment, what do you, like you mentioned it’s expected that we work 70 hours, what do you mean by underemployment?

 

Greg Garman: Well, what I mean is that from two factors is we sort of experienced, there are people who are incredibly well-trained but had to make a decision that they couldn’t work a 70-hour work week and that sort of leaves them in some ways outside of the workforce.

 

Christopher T. Anderson: Right.

 

Greg Garman: In that if you don’t work full time as a lawyer and you’re always working to build your book of business and always working to market and always working to do those things whether you’re in a small firm or big law, it’s not an area of law that’s lent itself to part-time employees on a particularly great level.

 

And then the supply demand curve, we’re just simply producing too many lawyers and those people are finding themselves dramatically underemployed in that when you look at the numbers as to employment which that the most reliable source of employment data is if you get a job that’s full-time, long-term that requires a JD for you to do your job. Those numbers are not particularly great. There’s still oftentimes upwards of 10-15% of a class that are going underemployed, a full year after —

 

Christopher T. Anderson: Yeah, 12 months later.

 

Greg Garman: After they’ve graduated and that stuff is incredibly difficult and then the reality is, is that when you look at the data that Clio and others put out as to the number of billable hours that the average small firm —

 

Christopher T. Anderson: It’s remarkable.

 

Greg Garman: It’s staggering how we have excess capacity of time that we’re really well-trained spend a lot of money at that training and we’re not putting it towards productive means always at the end of the day and these are really big macroeconomic trends that aren’t going away simply because the economy is getting better. Their fundamental changes in the legal marketplace that I think we need to address on a more fulsome basis.

 

Christopher T. Anderson: Yeah, now we’re about to head out to a break, but what I wanted to, like I just want to tell our listeners, this isn’t going to be all gloom and doom. We’ve got some — this is going somewhere and I think it’s going somewhere really positive for those who want to not drown but surf the wave.

 

But before we go on a break, I just want to ask one question because like what I’m hearing for me I just want to confirm really, I have noticed like what you said about the number of graduates, while totally true, I think the supply side is responding. Law school applications and matriculations are down and so that side of it is starting to respond to what you’re talking about, this sort of too many people going into a not growing market.

 

But you’ve also mentioned two things that are like overhangs, right? So you’ve got like you said 30-35, there were many, many years ago, we were producing close to 45,000 graduates all the way through this time period through 2006, 2007, 2008, 2009, 2010. And I think the scary one is what you were talking about and we’ll go into the details in a minute but the number of hours that are actually being produced by most of these. So like we could probably double the capacity of our ability to provide legal services without adding a single human being to legal services, just if we fix the 2 or 2.5 hours that Clio’s got out there as what solos are giving to the legal services.

 

Greg Garman: And the good news on that, Chris, is that, there’s a market that’s ready to double and that half of the legal services that are needed in this country don’t get a lawyer put on them because of the way we’ve — our businesses candidly haven’t evolved as quickly as they should.

 

So to sort of echo what you said, every meaningful piece of the economy from time-to-time chased — is facing challenges but you can and we should come out of this stronger on the other end provided we have the conversation as a group and we make the changes that are needed.

 

(00:14:56)

 

Christopher T. Anderson: Great. So I am talking to Greg Garman; he is the CEO of LAWCLERK and we have been talking about the supply-demand tidal wave that’s really impacting our business, the business of law, the fact that there is — we have been producing a lot of lawyers going into a marketplace that’s not growing yet. And also the fact that we are producing very few hours of productivity right now and I think we have at least shown a little bit of a light at the end of the tunnel and we are pretty sure it’s not an oncoming train, at least not for everybody.

 

But before we go into what we are seeing going forward, we will take a moment to hear a word from our sponsors.

 

[Music]

 

Advertiser: If you are missing calls, appointments and potential clients, it’s time to work with Nexa Professional. More than just an answering service, Nexa’s virtual receptionists are available 24×7 to schedule appointments, qualify leads, respond to emails, integrate with your firm’s software and much more. Nexa ensures your clients have the experience that they deserve. Give them a call at 800-267-9371 or visit them at nexa.com/podcast for a special offer.

 

[Music]

 

Advertiser: Feel like your marketing efforts aren’t getting you the high value cases your firm deserves? For over 15 years Scorpion has helped thousands of law firms, just like yours, attract new cases and grow their practices. As a Google Premier Partner and winner of Google’s Platform Innovator Award, Scorpion has the right resources and technology to aggressively market your law firm and generate better cases from the Internet. For more information, visit scorpionlegal.com/podcast today.

 

[Music]

 

Christopher T. Anderson: And we are back with Greg Garman, CEO of LAWCLERK and we are talking about the change wave in small law and pretty much the supply-demand tidal wave that’s been hitting the industry, causing what Greg has described as underemployment among a lot of attorneys, which is of course causing them to struggle.

 

There is a number Greg that you didn’t mention that I wanted to bring to the fore and we talked about the fact that we are only producing, and I forgot the exact number from Clio, you might know it, of hours on average of actual legal work.

 

But the other one was a research done by someone who just went into the IRS records and came out with what the average solo lawyer is taking home in income and it was under $50,000, which I think is demonstrative of that underemployment that you are talking about.

 

Greg Garman: Yeah, and it’s a terribly sad number because for the last couple of decades, legal really has been a place that the best and brightest go to. There are phases in history; they were the rocket scientists of the 60s and engineers and over the last couple of generations it was finance and law is where I think the test scores and the qualifications of applicants showed that we are a really good profession of really, really smart people and there really is I think a fundamental evolution to this business that is critical to get really smart people the amount of money that they deserve to make for the good work that they do.

 

Christopher T. Anderson: Yeah, and so one of the problems I think that this all highlights is with the underemployment, with this sort of supply-demand imbalance, and one of the points that you have made to me when we have talked before is that young attorneys particularly, attorneys coming out of law school, like you said brilliant people, they are not trained — they are trained by law school, but they are not trained to be lawyers in the way that we have done it before. They are not getting that training and mentoring. Why is that happening and what’s going to be the impact of that?

 

Greg Garman: Yeah. So I think law schools do a great job and they are really, really fabulous, smart people, but they tend to come from an academic background or they also tend to come from a big firm background that tends to be the criteria in which people make the jump to the academic world. They candidly don’t really have the skills themselves of ever operating their own businesses, and just like we learn the model rules in law school and not necessarily the rules of any given state, we are under serving students when it comes to teaching them the fundamentals of how to run a business.

 

And candidly, it had never been important before, because there really had been generations of lawyers who you either went to work for a smaller or larger firm and you learned on the job, it was very much in some ways like an apprentice program of some form and that you learned the business, the economics of timekeeping, of sending bills out, partners yelled at associates to make sure their time was in, just one way or another that the business lessons were learned.

 

So the world kind of changes, more and more, I don’t know, I don’t have the statistics at my fingertips, but the number of people who go right from law school to putting out their own shingle as a solo or small firm are staggeringly high, and they are just left to do this on their own without a great deal of training.

 

(00:20:06)

 

And so I do think that maybe there is a discussion to be had about — I know in my third year of law school I took really interesting courses on some Constitutional deep dives and bioethics and medicine and the law, maybe it’s time to put some of those more fundamental business courses kind of back in the curriculum. Or the firms I have run or been a part of, we have always had fairly robust summer programs, maybe those get extended into a for credit system in which you spend a year or a whole semester at a firm and you start to learn the fundamentals that way.

 

Christopher T. Anderson: Yeah. What are the numbers you are actually seeing, because I think — like the last time I looked solos and small firms constituted — lawyers working in solos and small firms under five lawyers were more than half, just barely more than half of the lawyers. Do you see that trend accelerating?

 

Greg Garman: It’s actually more than that now. Solos are 49% by themselves, one man or woman, they are 49%, and firms of five or fewer have made their way all — to about 76% were the last numbers I saw. I think that was about a year ago I saw those. So three out of every four lawyers are affiliated in firms of five or fewer and the reality is that being in a firm of five doesn’t mean that you have joined together to be full service. It doesn’t mean you have got a litigator and a real estate lawyer. Sometimes it means that the economics of sharing office space, sharing a conference room, sharing a secretary or paralegal are the reasons that you joined together.

 

Christopher T. Anderson: Yeah, I find those five lawyer firms to be really roommates rather than a business.

 

Greg Garman: Right. And think about it, so this is such a huge industry and the largest law firm by US head count, I know there are bigger law firms in the world, but I believe the largest law firm by head count is Greenberg Traurig, which is give or take 1,800, 1,900 US-based lawyers, that’s 1,900 lawyers out of a practice group of 1.36 million. I defy anybody to find an industry that is this big that has such low concentration at the top.

 

And so the average person on the street thinks of lawyers disproportionately in the context of big law, but that’s just really not where the bulk of the market is.

 

Christopher T. Anderson: Yeah, but that’s what people think it is.

 

Greg Garman: The bulk of the market is solo and smalls and that hasn’t been the focus. It hasn’t been the focus of people trying to change the business model.

 

Christopher T. Anderson: So let’s talk about the business model, because I think that’s the crux of it. We have — all the facts that we have just talked about, they are all results, they are all how rational human beings have responded, being the lawyers and the law firms have responded to the business model. They found that this is the way that they are going to respond to the business model, and like you said, it hasn’t been consolidated, it doesn’t respond the way other business models — other businesses of similar size have. So what’s wrong with the business model? What hasn’t happened that has happened with other markets?

 

Greg Garman: Yeah, so we really are going to get to the place where we talk about how to make it better, but the business model is something that — so I have this plaque on my desk and I think literally hundreds of thousands of lawyers across the country do, which is the plaque of Lincoln that says a lawyer’s time is —

 

Christopher T. Anderson: Stock and trade.

 

Greg Garman: Yeah, stock and trade, but that’s actually a bit of a misnomer. Until the 1960s the Bar Associations around the country generally set a maximum fee that could be charged for any particular piece of work. Contingency fees were permitted kind of beginning, I think my recollection is the 30s and 40s, but then it became in the 1960s, the first State Bar Associations decided that hourly billing was an ethical thing to do. And there is certainly no doubt that we as a profession embraced it over the last 70 years because it’s very profitable.

 

Since I have been a lawyer for nearly 25 years now, I have been hearing on a weekly basis that the billable hour is dead. And the reason why is very simple. We have a million business models that we could adopt, but none of them are as profitable as the billable hour, and we are smart people, we are not going to throw away our profit simply in the name of evolution of our business for all the reasons that are just obvious.

 

(00:24:49)

 

So I think that the problem is that if you were to bring a lawyer from the 60s forward to today, a lot of them still exist, but if someone who is at the end of their career in the 50s or 60s, they would recognize what we do without the computers on our desk and the phone systems exactly. And the business model needs to change and there have been two — in my opinion, there have been two primary reasons it hasn’t changed.

 

The first is that we as lawyers are trained in the art of precedent. We are trained to be cautious. The things that make entrepreneurs are driven out of us in law school, in some ways appropriately so, because we are a conservative lot by nature and precedent I think is the most important things.

 

I tell my partners at my law firm this all the time. You get in the Jack Welch business Hall of Fame if you bat 400, which means you fail more often than you succeed and you go tell your partners at a law firm you want to make a fundamental change in the business model and you are on the receiving end of a deposition questioning, and so it’s tough because we are trained to do that.

 

And the second thing is Bar Associations. Bar Associations and they have the best interests of clients at heart. I am generally a huge fan of what Bar Associations do, but in balancing protecting clients from unscrupulous lawyers, they have made it harder to evolve the business and that’s a balancing act that’s very hard, but it’s one that’s beginning to teeter the other direction as we have seen in recent weeks what Utah and other states have done, saying that we need to allow for more evolution to the business model.

 

So in my experience those are the two things that have held us back from changing the business model, but honestly that’s what we are devoting our — we at LAWCLERK are all about trying to help people bring their business model to look like something different and that’s what you have been doing.

 

Christopher T. Anderson: Yeah. And it’s interesting what you said about it being most profitable, in that that’s been true, there are other businesses that have in the past had an hourly billing rate. My car mechanic had an hourly billing rate and others have, and then I will tell you in a minute about a joke that goes over really well in unexpected places and really badly in unexpected places about billable hours.

 

But that holding us back has been particularly interesting and there is a lot of structural impediments to transferring from that. And when we come back from the break I want to go into those a little bit more, but first we are going to hear a word from our sponsors and when we come back I want to talk about the impediments to changing that business model and then I would like to hear from you a little bit about the cost structure and then start moving towards how we start to think about why it’s broken, what about it is broken, because the other problem, let’s talk about the death of the billable hour is, people say it, but then they don’t say why it’s so bad when you just explain why it’s so good, but first a word from our sponsors.

 

[Music]

 

Advertiser: Ready to create and build your own solo or small firm practice? Need a nuts and bolts education on the 360-degree experience of starting a business? There is only one online destination dedicated to helping you achieve your goals. Solo Practice University, the only online educational and professional networking community, dedicated to lawyers and law students, who want to go into practice for themselves. More than 1,000 classes, 58 faculty and mentors, what are you waiting for? Check out solopracticeuniversity.com today.

 

[Music]

 

LAWCLERK is where attorneys go to hire freelance lawyers. Whether you need a research memo or a complicated appellate brief, our network of freelance lawyers have every level of experience and expertise. Sign up is free and there are no monthly fees. Only pay the flat fee price you set. Use rebate code ‘unbillable’ to get a $100 Amazon gift card when you complete your next project. Learn more at lawclerk.legal.

 

Christopher T. Anderson: And welcome back to The Un-Billable Hour. We are talking with Greg Garman, the CEO and Founder of LAWCLERK, and what we are talking about is the structural business model challenges that have held law in place. I was going to say held it back, but I don’t think that’s fair, but they have positioned the business of law to be in a place where, it’s as Greg described, we are the last ones to be disrupted, and so going forward we are going to talk to him about why it’s broken and then we will move on to what we can do to fix it.

 

So Greg, it’s funny, one of the — I was going to — I told you I wanted to talk about one of the jokes I tell and it’s always been amusing to me when I am out on the road doing speeches, as I do a lot, I tell this joke and the joke is simply, when we are talking about the billable hour, we are talking about why the billable hour is really at the end of the day not the best for our clients who we are supposed to be serving. And really, while it is, as you described, it is very profitable, only if you don’t look at the business as a whole because it’s holding us back from growth. Transactionally it’s very profitable, strategically it’s not.

 

(00:30:15)

 

So the joke is I say, so there is really only two things that people want to pay for by the hour, and I have the audience guess, do you know what they are, and people always come up with the first one and never the second one. The second one is parking. People do prefer to pay for parking by the hour, and then the first one of course is sex and that goes over extraordinarily well in Salt Lake City. It goes over really well in a lot of — it went over great in Cheyenne, Wyoming, but yet I did it in Tulsa, Oklahoma and man, cricket, just cricket.

 

But anyway, so the truth is — and I think I would like you to speak to that, because to me what you said is very true that it is a very profitable business model, but like my car mechanic, when I first started driving 30 years ago, my car mechanic did charge by the hour, but now they have got like these rate books and they still pretend to charge by the hour. But just because the book says that to pull the radiator out and put a radiator back in is 2.7 hours, but they don’t actually spend 2.7 hours on it. It’s a proxy for dollars, for flat fee.

 

I would like you to react to my comment on the fact that it may be profitable transactionally, but not really strategically and why does it stick around.

 

Greg Garman: Yeah. So you actually nailed it, you called it a proxy, and that’s what we talk about all the time, which is the billable hour came out of a world in which it was the proxy or the measurement for value. It came from a world and an economy in which labor was disproportionately — factory labor or farm labor or some other — it was a manual economy. And we used time as a proxy for value and for delivery to an employer or to a customer or whatever the case may be.

 

But the economy has fundamentally reinvented itself, not only as a service economy, but as an economy based upon leverage, and I don’t mean financial leverage, I mean you can create a podcast and it goes to thousands and thousands of people. You can create a bit of code and it goes to millions of people. And so the old ways of measuring value, particularly through time, are no longer applicable in this world of leverage and that same form of leverage can be brought to legal.

 

So let’s think about it. We now have ways of measuring time, of measuring productivity. The best example of this, equating to your car mechanic analogy Chris, is if you look at the world of insurance defense, the insurance companies say your summary judgment motion can’t take more than, I am making up a number here, like 5.7 hours based upon data, that’s because they figured out a better proxy for value, and they determined the amount of time is going to equal this many dollars and that’s sort of what it takes to produce at the end of the day.

 

And so to me, this is the evolution of acknowledging that what we do as lawyers, while it’s really, really important, has been turned into much of a commodity. There is clearly going to be the company litigation that Disney and others engage in and Apple and Samsung, in which price is no object and the arguments are novel and cutting-edge, but that’s not 99% of legal. 99% of legal, what we do has been done before. It’s been done well before. We should learn from the work product that others and we have created.

 

And we as lawyers, we stick with the billable hour among other reasons because we have a bit of an inflated belief that what we do is like custom and bespoke made for our client and we forget that the largest fortunes in history, modern history, have all been commodities. If you think about it, we have got vast fortunes that were created in oil. We have got vast fortunes that were created in commodities of all form.

 

If you think about it today, smartphones have small differentiations between them, but they are a commodity product. Some are a little more luxury based than others, but it’s all the same product and they are built at scale. And we in legal have the ability to do that, but it’s going to require us to think about how we deliver our services, find ever more efficient ways to deliver our services, but at the end of the day selling a commodity over and over again into a bigger market is actually much more profitable than it is to sell a custom bespoke document one time, and this is sort of I think the beginning of the how do we make the world better.

 

(00:35:15)

 

We can expand our markets, lower the cost of the goods that we deliver by employing tools and strategies and technologies that allow us to leverage the knowledge that we have, leverage the work that we have done and be able to distribute it in a way that is more than just one-on-one, but in a way in which modern media and even to a certain extent modern medicine are able to leverage their knowledge base and their products to become a bigger piece of the economy in a way that fits with the evolution from a labor-based economy to a knowledge-based economy.

 

Christopher T. Anderson: And that does wrap up this edition of The Un-Billable Hour, the Law Business Advisory Podcast. We are obviously going to be continuing this conversation with Greg next episode.

 

And to the extent that this one might be a little depressing, a little bit dark, let me assure you that we are going somewhere with this and the end result is a really, really exciting message for lawyers, for law firm practitioners, for solo and small firm business owners, for what the opportunities are in the future that are being set up by the challenges that we have been talking about today.

 

So our guest today has of course been Greg Garman. He is the CEO of LAWCLERK. You can find out more about him at his website and Twitter that Greg will be reading to you here in a second, and if you have any questions, feel free to reach out to him or of course to me at the show.

 

Greg, where can folks reach out to you?

 

Greg Garman: Yeah, I love talking to people about this stuff. So it’s easy to reach us as a company at lawclerk.legal, but I love to hear from people. My email address is [email protected], and then you can reach me on Twitter @greg_garman, and it makes my day when I hear from and find people who are as passionate about this as we are.

 

Christopher T. Anderson: Fantastic. Thank you Greg.

 

Greg Garman: Chris, thanks so much for having me on.

 

Christopher T. Anderson: And of course this is Christopher Anderson and I look forward to seeing you next month as we listen to Greg Garman and we talk to you a little bit more about all the opportunity that comes from the challenges and the disruption that’s being set up as we speak and really look forward to continuing that conversation, so that you can continue to build a law firm business that works for you.

 

And remember, you can subscribe to all the editions of this podcast at legaltalknetwork.com or on iTunes. Thanks for joining us and we will see you again soon.

 

[Music]

 

Outro: The views expressed by the participants of this program are their own and do not represent the views of, nor are they endorsed by Legal Talk Network, its officers, directors, employees, agents, representatives, shareholders and subsidiaries. None of the content should be considered legal advice. As always, consult a lawyer.

 

[Music]

 

Thanks for listening to The Un-Billable Hour, the Law Practice Advisory Podcast. Join us again for the next edition, right here with Legal Talk Network.

 

[Music]

Brought to You by
Newsletter

Notify me when there’s a new episode!

Episode Details
Published: November 14, 2019
Podcast: Un-Billable Hour
Category: Business Law
Podcast
Un-Billable Hour
Un-Billable Hour

Best practices regarding your marketing, time management, and all the things outside of your client responsibilities.

Listen & Subscribe
Recent Episodes
11/26/19
Change Waves in Small Law: Surf or Drown? – Part 2

Greg Garman offers guidance for the future of small firm business models.

11/14/19
Change Waves in Small Law: Surf or Drown? – Part 1

Greg Garman shares insights on legal business models and current supply and demand trends in the profession.

10/16/19
Insight, Intake, Discovery: Making Less Equal More

Karin Conroy offers guidance for connecting with the right clients for your law firm.

09/18/19
Labor Eats Profits

Liz Goddard, co-owner of Cc: My Admin, discusses how virtual assistants help lawyers increase efficiency and grow profits.

08/27/19
How to Become Niche

Jacob Slowik offers insights for lawyers on how niche specialization can lead to career successes.

07/29/19
The Power of Empowered Teams

Helen Bukulmez explains how investing in the interests of your team creates a culture of unity in your firm.